New government tax check on licence applications

Important information

From 4 April 2022 the government will introduce mandatory tax checks through the Finance Act 2021 to confirm that the applicant is appropriately registered for tax.

These new rules will differ depending on whether the licence applicant is new or already licensed.

Applicants and licence holders are advised to contact HMRC, or your accountant should you require any specialist advice around your tax obligations. 

Existing licence holder or renewing licence

HM Revenue and Customs (HMRC) is introducing a new tax check that must be completed when any hackney carriage driver, private hire driver and or private hire operator (whether it be an individual licence holder, partnership or a company) renew their licences to drive taxis and private hire vehicles and operate a private hire business in England and Wales.

If a tax check is not completed, we will be unable to consider your application to renew your licence and your current licence will expire. This is a requirement from HMRC. 

From 4 April 2022, if a currently licensed driver or private hire operator renews a licence or decides to apply for a licence with a different licensing authority, they'll have to do a tax check. They'll be able to do this online through the digital service. A tax check will be required on each and every occasion a renewal licence application is submitted.

Existing licence holders are encouraged to submit their renewal licence applications at least 8 weeks in advance. This is so we can process your application, along with our new legally mandatory responsibility of making tax checks, to ensure your renewal licence is issued before the expiry of your current licence.

New applicants

From 4 April 2022, if a hackney carriage or private hire driver applicant or a private hire operator applicant is applying for a licence for the first time, they will not need to complete the tax check. However, we will ask applicants to read HMRC guidance on what they need to do to be properly registered for tax in the future in order to renew any licence and the driver will need to confirm they have done this.

Get ready for your tax checks

HMRC is introducing an online or digital tax check service which will start in March 2022 (exact date yet to be confirmed) for drivers and operators to undertake a tax check. HMRC wants people to prepare as early as possible by making sure they're registered to pay the appropriate taxes on their licensed income ahead of the changes and to continue to be licensed at the point of renewing your licence. 
 
If you've not registered to pay tax on earnings from your licensed trade, you should go to GOV.UK to check if you need to register as soon as possible.

You'll be able to complete this tax check on GOV.UK, through your Government Gateway account. You'll only need to answer a few questions to tell HMRC how you pay any tax that may be due on income you earn from your licensed trade. 

When you've completed the tax check, which only takes a few minutes, you'll get a 9-digit code. You must give this code to us. We cannot proceed with your licence application until the tax check is completed and we have received the code. The 9-digit code is only valid for 120 days. If the expiry date of the code has expired, you'll have to get another code.

We will only receive confirmation from HMRC that you've completed the tax check; we will not have access to your tax account. The check will not include any calculations, it is simply to confirm that someone is appropriately registered for tax. 

More information